GM announces $3 billion expansion in ChinaGeneral Motors will invest roughly $3 billion for a massive expansion of its Chinese production capacity, which will be accomplished by a major new-product assault. GM will take its production capacity from a current 550,000 to 1.3 million units by the time the project is completed in 2007, said Phil Murtaugh, chairman and CEO of the GM China Group. Powertrain operations in China would be expanded accordingly. Murtaugh said the investment prompts "an unprecedented race among global automakers" to tap into the booming Chinese market that has been growing at a rate of up to 100 percent annually in recent years. He noted the project will create significant investment and employment opportunities outside China for other GM operations to supply parts and components to the rapidly expanding assembly lines. GM has been steadily expanding its operations since setting up its first assembly line in 1998, but the rate of growth exceeds its own earlier expectations. Late last year it announced a plan that would have taken production to 865,000. The new expanded plan will allow GM to produce 20 new and significantly updated products, including at least three from Cadillac. Initially the automaker will import the CTS, SRX, and XLR, but it will later switch to local production. GM's announcement comes just before the Beijing Motor Show, at which other manufacturers are expected announce significant expansion plans. But at this time of expansion there are growing concerns of a market slowdown. Murtaugh said he is not especially concerned, because pent-up demand is just so great that any slowdown will only be a temporary one. -TCC Team
Preview: Beijing Motor Show by TCC Team (6/7/04)
Nissan shifts more than gears
Nissan El Grand
Infiniti going global
For years, Nissan's upscale Infiniti brand was little more than an asterisk on the luxury sales chart. But last year volumes blew the 100,000 mark, and "our intention is to (now) be recognized as a Tier 1 luxury brand all over the world," asserted Steve Wilhite, Nissan Motor Co.'s new global marketing czar. That means a global rollout of the brand, which had until now been limited to the U.S. market. The expansion will begin with a launch of the Infiniti nameplate in South Korea later this year, company officials revealed. Then, borrowing a page from its Asian rival, Lexus, Nissan's luxury brand will appear in the Japanese home market. The Russian market will follow, and sometime between 2007 and 2008, Infiniti will make its debut in Western Europe, according to NMC Vice President Simon Sproule. -TCC Team
Infiniti on the Upswing, Finally by TCC Team (12/29/2003)
Asian automaker finally finding a niche after a decade of wandering.
International labor pioneer Reuther dies
Victor Reuther, one of the last links to founding of the United Auto Workers during the 1930s, has died at age 92. Ron Gettelfinger, the current UAW President, said, "The entire UAW community is saddened by the loss of Victor Reuther, a pioneer of our union whose passion for social justice and talent as an orator energized and mobilized early sit-down strikers." Victor was the younger brother of Walter Reuther, UAW president from 1947 until his death in a plane crash in 1970 and who is widely credited with building the union into a force inside the UAW. The third brother, Roy Reuther died in 1968 but had played a key role in developing the UAW's widely respected political organization. All three had played key roles in the birth and growth of the UAW, Gettelfinger said.
UAW Pioneer Dies by Joseph Szczesny (6/7/04)
Victor Reuther's international vision for the union helped keep it strong.
Holleran named communications chief at Ford
Ford Motor Co. last week announced the appointment of Charlie Holleran as its vice president and chief communications officer, effective June 14. Holleran will manage internal and external global communications and report directly to CEO Bill Ford. Most recently, Holleran has been head of corporate communications for Computer Associates International, and he has also held executive positions with Coca-Cola, PricewaterhouseCoopers, and Digital Equipment Corporation. With the appointment of Holleran, Jim Vella will be able to focus on his new position of Ford vice president and chief of staff, also reporting to Bill Ford.
Domestics still relying on high incentives
While overall May sales showed strong, a new assessment from Merrill Lynch confirmed that higher sales are coming at a cost - especially for the domestic brands - as incentives continue to rise. The average auto incentive per unit increased by 11.8 percent versus May of last year, to $3046 per vehicle. Asian and European brands continued to offer much lower incentives, at $1529 and $2642 per vehicle, respectively, as some domestic brands offered incentives thousands above the average. There's no sign of the incentives letting up anytime soon, either. GM just announced $5000 incentives on some models, and Ford just added an additional $1000 on its Freestar minivan. For May, domestic-brand sales increased 5.1 percent as sales of foreign brands increased 13.1 percent. "Record incentive spending helped deliver higher sales in May," reported Merrill Lynch automotive industry analyst John Casesa, "It appears that OEMs are sticking with what works in order to keep sales up during June and continue to narrow the inventory gap." Both Ford and GM have modest cuts in their third-quarter production schedules revealed last week, in keeping with normal seasonal patterns. -Bengt Halvorson
May Sales Strong by Joseph Szczesny (6/3/04)
High gas prices don't seem to be affecting prices - yet.
Roche, former GM chief, dies
Former General Motors chairman and CEO James M. Roche died Sunday at age 97. Roche held the top spot at GM from 1967 to 1971 and was active on the board of directors until 1977, through a time that included the 1967 Detroit riot. Roche first joined GM in 1927 as a statistician for Cadillac's Chicago office, then after several other positions was named Cadillac's general manager and GM vice president in 1957. Roche was also known for his interest in assisting in Detroit's economic recovery, and in establishing employee assistance programs and progressive hiring practices. In a company release, retired GM chairman Jack Smith said of Roche, "If there ever was a was a template designed to merge corporate and community leadership into one role, Jim Roche was the example."
Ford sees big share gain in China
Insisting Ford is "here for the long haul," Ron Tyack, president and CEO of Changan Ford, denied criticism that the number-two U.S. automaker has been far too timid in its Chinese growth strategy. Ford and its partners are now looking to spend about $1 billion in an expansion plan that, among other things, will boost production capacity in Chongqing from 20,000 to 150,000 units a year. And it is preparing plans for a second plant in Nanjing. Ford is also stepping up imports and, for the first time at the Beijing Motor Show this week, will display products from global brands such as Aston Martin and Jaguar that it believes will have big potential in China's mushrooming luxury market. Ford's Volvo division already is a small but successful import brand, and Mazda is looking for volumes approaching 100,000 in China this year. All told, Nyack acknowledged a near-term goal for Ford's various brands to capture anywhere from seven to ten percent of the Chinese market. At the current pace, with sales expected to hit five million this year, that would mean Ford group volumes of more than 350,000. Nyack declined to say just how much more capacity Ford might eventually need to meet its goals. -TCC Team
VW plans new factories in China
Volkswagen AG will begin work next week on a factory near Shanghai that will focus on exports and have a capacity of up to 300,000 cars per year. Funding for the $240 million plant will reportedly come from the more than $6 million that the automaker plans to invest in China over the next three years. The plant, in Lin Gang, near Shanghai, will begin production in two to three years at a production volume of 150,000 units, but that could be stepped up depending on demand. VW intends to increase the portion of China-sourced parts content in its cars to keep prices competitive, and it plans to build two new engine factories in China. According to a Bloomberg report, one of those would be in Dalian, in the northeastern region. Through joint-venture arrangements, Volkswagen already produces several vehicle models at two plants, one just east of Shanghai and the other in Changchun City, also in the northeast.
Designworks names Kloos as new chief
DesignworksUSA Tuesday named Verena C. Kloos president of the California design house owned by BMW AG. Kloos replaces Adrian van Hooydonk, who was recently named head of design for BMW brand vehicles. Kloos most recently was head of DaimlerChrysler's Advanced Design studio in Como Italy where she was responsible for interior design on future Mercedes and Chrysler brand vehicles. She was also design director for Volkswagen's U.S. design center in Simi Valley, California, from 1991 to 1994. A German, Kloos earned her Fine Arts degree from the University of Fine Arts in Braunschweig. Designworks has led BMW design efforts on vehicles including the current 7-Series, 1-Series, and Z4. But the studio does considerable work for other clients. BMW provides 60 percent of Designworks' business; the rest comes from a diverse group of clients including Adidas, Atomic Snowboards, Nokia, Microsoft, Hewlett-Packard, office furniture maker izzydesign, and John Deere. In a new book about BMW, "Driven: Inside BMW, The Most Admired Car Company in the World," Bangle says about Designworks: "This is an invaluable resource for BMW, being able to have its designers working for other companies in other categories...the learning, the inspiration, and cross-pollination that occurs - it keeps designers fresh." -Jim Burt
Harbour Report: DCX tops Ford
U.S. automakers have not only dramatically closed the quality gap with Japanese rivals, but are rapidly closing the productivity gap as well. But soaring healthcare costs for retirees supported by the U.S. automakers - a problem the Japanese don't have - will keep the profitability gap wide for years to come. According to the Harbour Report released Thursday, General Motors, which leads domestic makers, improved five percent, while Chrysler bested Ford for the first time with a 7.8 percent improvement. Ford improved 3.4 percent. Harbor Consulting president Ron Harbour says flexibility and design are the keys to improving productivity, and while the Japanese companies have led in these areas, the domestics are catching up. "The leader used to have assembly productivity of 24 hours per car, and now that's the average," says Harbour. "And if you have a year in which there are four or five launches that delivers a small hit to volume, you can fall from first to fifth." Even in the ranking of U.S. and Asian automakers by assembly hours per vehicle is a little misleading regarding the gap between Nissan, for example, and GM. While Harbour counts all of GM's, Ford's and Chrysler's North American plants, Nissan only lets Harbour into its Smyrna plant, while Honda leaves two of its plants out of the study and Toyota keeps its Indiana plant out of the study. -Jim Burt
Kia looking for a new agency
Kia Motors America this week launched a search for a new ad agency as it fights to gain credibility in the marketplace and distinguish itself from its larger Korean cousin Hyundai. Kia spokesman Kim Custer says the move is part of normal operations, and that the company likes to review its vendors every five years. "It's not about dissatisfaction at all," says Custer. Current agency David & Goliath won the business in 1999 and is guaranteed a spot as a finalist in a competition that will probably be boiled down to two or three other agencies.
2003 Kia Sorento